Correlation Between PJ Metal and Samsung Biologics
Can any of the company-specific risk be diversified away by investing in both PJ Metal and Samsung Biologics at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining PJ Metal and Samsung Biologics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PJ Metal Co and Samsung Biologics Co, you can compare the effects of market volatilities on PJ Metal and Samsung Biologics and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in PJ Metal with a short position of Samsung Biologics. Check out your portfolio center. Please also check ongoing floating volatility patterns of PJ Metal and Samsung Biologics.
Diversification Opportunities for PJ Metal and Samsung Biologics
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 128660 and Samsung is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding PJ Metal Co and Samsung Biologics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Biologics and PJ Metal is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on PJ Metal Co are associated (or correlated) with Samsung Biologics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Biologics has no effect on the direction of PJ Metal i.e., PJ Metal and Samsung Biologics go up and down completely randomly.
Pair Corralation between PJ Metal and Samsung Biologics
Assuming the 90 days trading horizon PJ Metal Co is expected to generate 0.86 times more return on investment than Samsung Biologics. However, PJ Metal Co is 1.16 times less risky than Samsung Biologics. It trades about 0.39 of its potential returns per unit of risk. Samsung Biologics Co is currently generating about 0.13 per unit of risk. If you would invest 270,734 in PJ Metal Co on October 11, 2024 and sell it today you would earn a total of 31,766 from holding PJ Metal Co or generate 11.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PJ Metal Co vs. Samsung Biologics Co
Performance |
| Timeline |
| PJ Metal |
| Samsung Biologics |
PJ Metal and Samsung Biologics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PJ Metal and Samsung Biologics
The main advantage of trading using opposite PJ Metal and Samsung Biologics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PJ Metal position performs unexpectedly, Samsung Biologics can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Samsung Biologics will offset losses from the drop in Samsung Biologics' long position.| PJ Metal vs. Alton Sports CoLtd | PJ Metal vs. PlayD Co | PJ Metal vs. Kbi Metal Co | PJ Metal vs. Shinhan Inverse Copper |
| Samsung Biologics vs. DB Insurance Co | Samsung Biologics vs. Wireless Power Amplifier | Samsung Biologics vs. Korean Reinsurance Co | Samsung Biologics vs. Hyundai Home Shopping |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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